Table of Contents
1 Review of Financial Statements 01–239
Introduction 01–02
Applicability 03
Consideration of Materiality in a Review Engagement 04–10
Requirements 11–234
General Principles for Performing and Reporting on Review Engagements 11
Professional Skepticism in a Review Engagement 12–16
Engagement Level Quality Control in a Review Engagement 17–21
Independence 22–24
Preconditions for Accepting a Review Engagement 25–30
Communications With Predecessor Accountants 31–34
Agreement on Engagement Terms 35–38
Understanding of the Industry 39
Knowledge of the Entity 40–68
Designing and Performing Review Procedures 69–72
Analytical Procedures 73–113
Illustrative Analytics 114–119
Inquiries and Other Review Procedures 120–143
Illustrative Inquiries 144–145
Reading the Financial Statements 146–148
Reconciling the Financial Statements to the Underlying Accounting Records 149
Evaluating Evidence Obtained From the Procedures Performed 150–153
Written Representations 154–160
Communicating to Management and Others Regarding Fraud or Noncompliance With Laws and Regulations 161–168
Reporting on the Financial Statements General 169–170
Reporting on Financial Statements Prepared in Accordance With a Special Purpose Framework 171–175
Reporting on Comparative Financial Statements 176–182
Reporting on Known Departures From the Applicable Financial Reporting Framework 183–188
Emphasis–of–Matter and Other–Matter Paragraphs in the Accountant s Review Report 189–193
Alert That Restricts the Use of the Accountant s Review Report 194–197
Reporting on Financial Statements Prepared in Accordance With a Financial Reporting Framework
Generally Accepted in Another Country 198–201
The Accountant s Consideration of an Entity s Ability to Continue as a Going Concern 202–207
Subsequent Events and Subsequently Discovered Facts 208–214
Initial Review Engagements Opening Balances 215–217
Reference to the Work of Other Accountants in an Accountant s Review Report 218–220
Supplementary Information That Accompanies Reviewed Financial Statements 221–223
Required Supplementary Information 224–226
Change in Engagement From Audit to Review 227–231
Review Documentation 232–234
Illustrative Engagement Letters 235
Illustrative Representation Letter 236–238
Illustrative Accountant s Review Reports on Financial Statements 239
2 Compilation of Financial Statements 01–102
Introduction 01–02
Applicability 03
Requirements 04–86
General Principles for Performing and Reporting on Compilations of Financial Statements 04
Engagement Level Quality Control in a Compilation Engagement 05–09
Independence 10–11
Preconditions for Accepting a Compilation Engagement 12–17
Agreement on Engagement Terms 18–21
Knowledge and Understanding of the Entity s Financial Reporting Framework 22–26
Reading the Financial Statements 27
Other Compilation Procedures 28–35
Reporting General 36–37
Reporting Financial Statements Prepared in Accordance With a Special Purpose Framework 38–41
Reporting Financial Statements that Omit Substantially All the Disclosures Required by the Applicable Financial Reporting Framework 42–49
Reporting Comparative Financial Statements 50–62
Reporting When the Accountant Is Not Independent 63–65
Reporting Known Departures From the Applicable Financial Reporting Framework 66–71
Reporting Supplementary Information That Accompanies Financial Statements and the Accountant s Compilation Report Thereon 72–74
Reporting Required Supplementary Information 75–77
Reporting Alert That Restricts the Use of the Accountant s Compilation Report 78–79
Reporting Emphasis–of–Matter or Other–Matter Paragraphs 80
Reporting Financial Statements Prepared in Accordance With a Prescribed Format 81–86
Compilation of Specified Elements, Accounts, or Items of a Financial Statement 87–90
Change in Engagement From Audit or Review to a Compilation Engagement 91–96
Documentation Requirements 97–99
Illustrative Engagement Letters 100
Illustrative Examples of the Accountant s Compilation Report on Financial Statements 101
Exhibit Compilation Reporting Requirements When Independence Is Impaired 102
3 Preparation of Financial Statements 01–50
Introduction 01
Applicability 02–07
Independence 08–09
Requirements 10–49
General Principles for Performing Engagements to Prepare Financial Statements 10
Engagement Level Quality Control in an Engagement to Prepare Financial Statements 11–15
Preconditions for Accepting an Engagement to Prepare Financial Statements 16–18
Agreement on Engagement Terms 19–22
Knowledge and Understanding of the Entity s Financial Reporting Framework 23–27
Preparing the Financial Statements 28–34
Preparation of Financial Statements in Accordance With a Special Purpose Framework 35–36
Preparation of Financial Statements That Contain a Known Departure or Departures From the Applicable Financial Reporting Framework 37–38
Preparation of Financial Statements That Omit Substantially All Disclosures Required by the Applicable Financial Reporting Framework 39–41
Preparation of Financial Statements Included in a Prescribed Form 42–44
Communication With Management 45–46
Documentation Requirements 47–49
Illustrative Engagement Letters 50
4 Compilation of Pro Forma Financial Information 01–24
Introduction 01
Applicability 02–03
Requirements 04–22
General Principles for Compilations of Pro Forma Financial Information 04–06
Acceptance and Continuance of Client Relationships 07–09
Agreement on Engagement Terms 10–13
The Accountant s Knowledge and Understanding of the Entity s Financial Reporting Framework 14
Compilation Procedures 15–16
The Accountant s Compilation Report on Pro Forma Financial Information 17–20
Documentation 21–22
Illustrative Engagement Letter for a Compilation of Pro Forma Financial Information 23
Illustrative Accountant s Compilation Report on Pro Forma Financial Information 24
5 Preparing or Performing a Compilation or Review of Personal Financial Statements 01–26
Introduction 01
Accounting Considerations 02–05
Internal Control With Respect to Personal Financial Statements 06–08
Agreement on Engagement Terms 09–11
Fraud and Illegal Acts in an Engagement to Prepare or in a Compilation or Review of Personal Financial Statements 12–14
Representation Letters 15–17
Compilation and Review Reports on Personal Financial Statements 18–20
Departures From the Applicable Financial Reporting Framework 21–22
Illustrative Engagement Letters 23
Illustrative Representation Letter 24–25
Illustrations of Accountant s Compilation and Review Reports on Personal Financial Statements 26
Appendix
A Overview of Statements on Quality Control Standards Glossary
Index of Pronouncements and Other Technical Guidance
Subject Index
